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ChinaSat to Acquire Satellite
From Space Systems/Loral

AP-Dow Jones News Service

Updated March 24, 1997 12:01 a.m. ET

BEIJING -- China Telecommunications Broadcast Satellite Corp., which is known as ChinaSat, has signed a contract to purchase a telecommunications satellite valued at $100 million from Space Systems/Loral, according to executives of the
Loral Space & Communications Ltd.
unit.

Called ChinaSat-8, it will be the most powerful satellite China has ever bought, said Robert Berry, president of Space Systems/Loral. The satellite will provide video, data and digital voice service throughout the country, he added.

ChinaSat is wholly owned by China's Ministry of Posts and Telecommunications, and Loral Space & Communications is a subsidiary of Loral Corp. of the U.S.

ChinaSat-8 replaces a telecommunications satellite lost through a launch mishap last year. The new satellite is 10 times more powerful that any satellite the ministry previously has placed in orbit, Mr. Berry said. It is scheduled for launch in late 1998 and is expected to begin service in 1999, he added.

ChinaSat had announced in January that it had chosen Space Systems/Loral to build ChinaSat-8, and the contract has since been finalized, Mr. Berry said. The total value of the ChinaSat-8 project is about $200 million, according to Space Systems/Loral executives.

'Long-Term Relationship'

"This contract, coupled with ChinaSat's earlier agreement to be the exclusive Globalstar service provider in the People's Republic of China, reinforces and solidifies Loral's long-term relationship with the [ministry], the major telecommunications provider in China -- a large and important market for Loral," said Bernard Schwartz, chairman and chief executive of Loral Space & Communications.

Globalstar Telecommunications Ltd., an independently traded venture with investments from both Loral and
Qualcomm Inc.
of the U.S., is to offer low-earth-orbit satellite-based telecom services throughout the world. Loral expects 200,000 subscribers to the Globalstar satellite network in China by the year 2002.

The Globalstar system involves a total investment of $2.5 billion and mainly targets remote regions not easily serviced by other forms of telecommunications. The signals from Globalstar's satellites are to be patched into existing telecommunications networks.

Use of Chinese Rockets

Mr. Berry also disclosed that Space Systems/Loral will use Chinese Long March rockets for launching several of the 47 satellites the company has scheduled for orbit. The first launch with a Chinese rocket is set for June this year, he said.

According to Henry Stackpole, president of Loral's operations in the Asian-Pacific region, the Chinese rocket will carry the Mabuhay 3 satellite for the Philippines and the Apstar-IIR for APT Satellite Holdings Ltd. of Hong Kong, a China-controlled consortium.

Loral has relied on a variety of carriers to meet heavy demand and it increasingly will rely on Chinese rockets as their launches become more reliable, Mr. Stackpole said.

A Loral-made satellite for U.S.-based Intelsat was destroyed in February 1996 when the Chinese rocket veered seconds after lift off and slammed into a hillside.

Mr. Stackpole said the Chinese companies involved in the launch program -- China Aerospace Corp. and subsidiary China Great Wall Industrial Corp. -- have used foreign technological know-how to improve their rockets and launching procedures.

"We feel that the steps the Chinese have taken are prudent, and the problem that the Chinese have in their launch industry is to convince the insurance underwriters," Mr. Stackpole said.

Loral Corp. was acquired by
Lockheed Martin Corp.
in 1996 and its stock subsequently was delisted, but shares in Loral Space & Communications still trade on the New York Stock Exchange.